USDINR opened gap down at 81.10 y’day and the pair traded in the 80.99-81.32 range. Spot USDINR closed at 81.21, loss of 21 ps for USD as against prior close of 81.42. Rupee’s gain could be attributed to inflows and USD index weakness.
RBI reference rate was fixed at 81.15 on 01/12. Dec USD/INR closed at 81.36, loss of 12 ps for USD as compared to prior day’s close of 81.48. Dec Euro/INR closed at 84.96, GBP/INR at 98.81 and Yen/INR at 59.82. USDINR fwd premia was trading at around 1.95% p.a. FX reserves stands at USD 547 bn as on Nov 18th. FX reserves rose by USD 3.5 bn as compared to previous week..
| PAIRS | RBI REF RATE (01/12) |
| USDINR | 81.15 |
| EURINR | 84.74 |
| GBPINR | 98.17 |
| JPYINR | 59.49 |
In Nov, FII’S have bought Rs 28042 Cr of Equities till date and have bought Rs 328 Cr of debt till date. In this Calendar Year, FII’S have sold close to Rs 1.18 lac Cr worth of Equities. In 2021-22, FII’S net sold Rs 128897 cr in Equity segment and have net bought Rs 4805 cr of debt. In 2020-21 financial Year, FII’S nett bought Rs 2,74,203 Cr of Equities and have sold Rs 42820 Cr in debt.
Benchmark Nifty climbed 50 points (0.29%) y’day. DOW declined 195 points y’day (0.56%). Nikkei climbed 0.92% and Hang Seng climbed 0.75% y’day.
Euro is now at 1.0515, Pound at 1.2241, Yen at 135.32.
Commodities: Gold is now at USD 1813 and WT1Crude at USD 81.11/Brent at USD 86.80.
Interest rates: USD 10 Yr yield is at 3.53% and 3 m libor closed at 4.67%. Indian 10 yr benchmark yield closed at 7.21%.
Economic news: PMI(mfrg) climbed to 3 month high of 55.7 in Nov. November PMI data pointed to an improvement in overall operating conditions for the 17th straight month. Nov GST grew 11% y/y to 1,45,867 Cr.
Dollar weakened after US PCE inflation slowed more than expected in October, while core PCE also declined. The data give a nod to Fed Chair Jerome Powell’s comment that smaller rate hikes could start in December. PCE price index rose 0.3% mom, below expectation of 0.5% mom. PCE core (excluding food and energy) rose 0.2% mom, below expectation of 0.4% mom. PCE price index slowed from 6.3% yoy to 6.0% yoy.
US ISM (mfrg), EU and UK PMI (mfrg) remained in downtrend.
EUR/USD has broken above 1.05 and has entered into bull mode. USD INDEX is also trading below 105.50, a crucial 200 day moving average support level. Rupee’s gain based on USD Index movement would depend on RBI’S tolerance and FX mopping to shore up reserves again.
Data highlights: – US Weekly jobless claims dipped to 225k, Personal income climbed 0.7% m/m, spending climbed 0.8% m/m, Core PCE index moderated to 0.2% m/m.
-US ISM(mfrg) was in contraction mode at 49,and construction spending declined -0.3% m/m.
-EU unemployment rate dipped to 6.5%, PMI(mfrg-final) was reported at 47.1.
-UK PMI(mfrg-final) was reported at 46.5.
Friday’s calendar : – US employment data
-EU PPI
| USD/INR | 81.32 | 80.99 | ||
| EUR/USD | 1.0515 | 1.0539 | 1.0394 | |
| GBP/USD | 1.2241 | 1.2311 | 1.2070 | |
| USD/JPY | 135.32 | 137.52 | 135.04 |
Daily Support/Resistance table
| Currency Pairs | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| EURO/USD | 1.0487 | 1.0540 | 1.0632 | 1.0725 | 1.0435 | 1.0342 | 1.0290 |
| GBP/USD | 1.2213 | 1.2356 | 1.2453 | 1.2596 | 1.2115 | 1.1973 | 1.1875 |
| USD/JPY | 135.91 | 136.78 | 138.39 | 139.25 | 134.30 | 133.43 | 131.82 |
| USD/INR | 81.17 | 81.35 | 81.50 | 81.02 | 80.84 |
MAJOR SUPPORTS/RESISTANCES AND TREND TABLE
| Currency Pair | Supports | Resistances | Trend | Remarks |
| EURO/USD | 1.0290 | 1.06 | UP | SIDE<1.0290 |
| GBP/USD | 1.1930/1.1760 | 1.23 | UP | SIDE<1.1760 |
| USD/JPY | 134 | 140.50/142.25 | DN | SIDE>142.25 |
| USD/INR | 80.50 | 81.95/82.20 | SIDE | UP>81.95 |
| USD/CHF | 0.9370/0.9090 | 0.9770 | DN | SIDE>0.9770 |
Technicals: Spot closed below 50, 200 day major moving averages.20 day moving average is at 81.65. 50 day moving average is at 81.81.200 day moving average is at 78.07. Daily MACD is in sell zone. Important support is at 80.50 and important resistance is at 81.95. Spot closed above its average level of the day.
Intraday supports and resistances for Dec contract are:
PP: 81.30, S1:81.16, S2:80.96, R1:81.50, R2:81.64.
Hedging strategy: Hedging decisions be taken according to comfort and accounting rates.
However on directional basis, suggest the following:
Imports be hedged at 80.75.
CROSS CURRENCY TECHNICALS:
EURO/USD: The pair is above 50 and 20 day major moving averages. Major resistance is at 1.06. Next major support is at 1.0290. Daily MACD is in buy zone, implying an important bottom at 0.9535. Weekly MACD is in buy zone, implying important bottom at 0.9535.
GBP/USD: The pair is above 50 and 20 day moving averages. Daily MACD is in buy zone, implying important bottom at 1.1150 and weekly MACD is in buy zone, implying important bottom at 1.0380. Important support is at 1.1930/1.1760. Important resistance is at 1.23.
USD/YEN: The pair is below 20, 50 and 100 day moving averages. Daily MACD is in sell zone, implying important top at 152. Important support is at 134. Major resistance is at 140.50/142.25.
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